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The major section dealing with science and innovation policy reads as follows (pp 9 – 10):

Innovation and Commercialisation
We will implement innovation and commercialisation policies as outlined below subject to cost benefit analysis.
• We will progressively implement the recommendations in the Trading and Investing in the Smart Economy Report
• We will support our indigenous digital game industry by reforming R&D supports available to the industry, setting aside funding from Innovation Fund Ireland for a seed capital scheme for Irish digital gaming start-ups, introduce a digital media component to Transition Year programmes and promote Ireland as digital gaming hub.
• We will develop Ireland as a ‘digital island’ and first-mover when it comes to information technology by ensuring more progress on e-Government and moving Government services online, investing in ICT in schools, and investing in information technology in the healthcare sector.
• We will make Ireland a leader in the emerging I.T. market of cloud computing by promoting greater use of cloud computing in the public sector, organising existing State supports for cloud computing into a package to promote Ireland as a progressive place for I.T. investment, establishing an expert group to address new security and
privacy issues arising from the use of cloud computing and reviewing the adequacy of current legislation and identify what steps need to be taken to ensure a supportive regulatory environment.
• We will develop a National Intellectual Property (IP) protocol to give predictability about the terms on which business can access IP created in Higher Education Institutions and the wider digital sector.

• We will promote and support investment in technology research, development and commercialisation beyond basic research supported by Science Foundation Ireland, as well as removing barriers to innovation and accelerate exploitation of new technologies.
• We will target key technology areas and sectors where innovation can be applied including but not limited to high value manufacturing, advanced materials, nanotechnology, bioscience, electronics, photonics and electrical systems and information and communication technology. We will also focus on the application of technological innovation in established sectors of the economy like energy generation and supply, transport, creative industries, high-value services and architecture and construction by identifying challenges, establishing priorities and developing strategies which specify necessary actions to transition to more innovative approach.
• We will promote Ireland’s full engagement with the ‘Innovative Union’ proposals issued by the European Commission in October 2010 as one of the seven flagship initiatives under EU2020 Strategy, with the specific aim of refocusing R&D and innovation policy on major challenges and at turning inventions into products.
• The critical gap between basic research promoted and funded by Science Foundation Ireland and third level institutions and its subsequent development into commercial opportunity for investors can only be closed by making new technologies ‘investment ready’. We will establish a network of Technology Research Centres focused on
applied technological research in specific areas, to be linked to appropriate highereducation institutions. The centres will accelerate exploitation of new technologies by providing infrastructure that bridges gap between research and technology commercialisation. We will initially establish 3 additional centres foccussing on
biotechnology, nanotechnology and high value manufacturing. Further centres from a number of other areas will be selected at a later time.
• We will support the development of an International Content Services Centre to make Ireland world leader in managing intellectual property.
• We will pioneer within the EU a model of ‘fair use’ in European Copyright Law, like in the USA, which effectively permits the use of portions of a copyrighted work so long as the normal economic exploitation of the originating work is not undermined. This will allow internet companies and other digital innovators to bring their services
to market.

Subject to a cost benefit analysis, we will amend the R&D tax credit regime to make it more attractive and accessible to smaller businesses, in the following ways:
• Companies with R&D expenditures of under €100,000 will be entitled to full tax credit on those entire expenditures as opposed to just the increment over the base year, with marginal relief for companies with expenditure just over €100,000.
• We will allow companies to offset the R&D credit against employers. PRSI as an alternative to corporation tax.
• To cut down on red tape in the applications process, companies in receipt of a Research, Technology and Innovation (RTI) grant from one of the development agencies will be automatically deemed as entitled to the R&D tax credit.

Other relevant pieces:

Investment priorities will include education, health and science and technology (p. 16)

Undertake a full review of the Hunt and OECD reports into third level funding before end of 2011. Our goal is to introduce a funding system that will provide third level institutions with reliable funding but does not impact access for students (p 17)

Maths and science teaching at second level will be reformed, including making science a compulsory Junior Cert subject by 2014. Professional development for maths and science teachers will be prioritised. (p 40)

Third Level Reform (p 43)
We will review the recommendations of Hunt report on higher education. A reform of third level will be driven by the need to improve learning outcomes of undergraduate degree students, as well as providing high quality research.
We will initiate a time-limited audit of level 8 qualifications on offer and learning outcomes for graduates of these courses.
We will introduce radical reform in third level institutions to maximise existing funding, in particular reform of academic contracts and will encourage greater specialisation by educational institutions.
We support the relocation of DIT to Grangegorman as resources permit.
We will explore the establishment of a multi campus Technical University in the South East.
We will extend the remit of Ombudsman to third level institutions.
We will merge the existing accreditation authorities; National Qualifications Authority, FETAC and HETAC to increase transparency.

[This is the last in a series of posts relevant to the all-consuming topic in Ireland at the moment: the fall of the Fianna Fail/Green Party Coalition Government, and the resulting general election to take place on the 25 February 2011. My title approximates a question/comment posed by a guest (I think it was Jim Glennon, the former FF TD) on George Hook’s programme on Newstalk].

Note 2: Dermot Desmond has just published a remarkable document addressing some of the same issues as treated here from a sociopolitical reform point of view.

A truism of human behaviour is that people are incentive-driven (even by perverse incentives). Our economy became focused lopsidedly on property development because of tax incentives which people rationally responded to, resulting in a huge excess of un-needed properties. Groupthink suggests bulldozing them. However, we could incentivise property purchases by granting Irish residency to non-EU Nationals who purchase these properties for cash (no mortgages please)! If it is possible to incentivise investment in fixed assets such as property, it is possible to incentivise investment in new asset classes and businesses that are tradeable and saleable. Anglo-Irish Bank would not be in such trouble if it had a diversified loan book. Ireland Inc would not be in similar trouble, if there were multiple investment vehicles for rational investment in intellectual property, as opposed to the singularly obsessive concentration on investment in commercial and residential property. If we want an entrepreneurial culture which creates desperately-needed mass employment, then entrepreneurial activity needs to be incentivised. Adding taxes and other burdens on the self-employed reduces the risk-taking required to create employment on the scale needed to rescue the economy quickly. Risk-taking needs incentives; otherwise, why bother?

There are many other cognitive errors (for example, availability and affect heuristics, motivated reasoning, competence illusions, illusory superiority) which humans are also prone to (especially under duress). Memory (particularly recall) is badly affected by stress and lack of sleep. The decisions taken on the night of the infamous bank guarantee surely would have been better, if the Government had access to expertise and bought itself time (for example, by having a forced bank closure for 48 hours). This would have led to decisions in the cold light of day, with appropriate supports and inputs (of course, having an Economic Advisory Council in place would have helped). Memory for the precise sequence of events would be improved too!

Our elites must recognise that individual rationality and cognition is limited and error-prone. A system driven by the unrestrained cognition of individual ministers or others will fail; imposing political control where good policy formation should obtain is a recipe for disaster. And we know this, but this is the mistake we repeatedly make. Thus, our institutions must be re-engineered to be adaptive, plastic, and capable of learning (especially upsetting and unpleasant truths). Robust institutional processes are required to recognise error and failure quickly and to change course rapidly. However, the glacial pace with which our elites move leaves me believing this is a forlorn hope; we have seen little recognition of the need for change, despite the disaster that has occurred.

[This is the fifth in a series of posts relevant to the all-consuming topic in Ireland at the moment: the fall of the Fianna Fail/Green Party Coalition Government, and the resulting general election to take place on the 25 February 2011. My title approximates a question/comment posed by a guest (I think it was Jim Glennon, the former FF TD) on George Hook’s programme on Newstalk].

The crime debate in the UK was dominated by the phrase ‘short, sharp, shock’, which relied on the folk theory that quick and severe punishment would shock teenagers out of criminal tendencies. (The pleasing alliteration of the successive sibilants was an important, but useless, selling point too). Short, sharp shocks, of course, predictably have no such effect, but why let data from the psychology of punishment and from criminology influence debate?

The phrase ‘cut and run’ was used to forestall debate about the palpably-failing US military strategy in Iraq, until empirical reality forced a change of direction.

The debate in Ireland over privatisation uses phrases designed to prevent discussion, such as ‘selling off the family silver ware’* or, much less analytically, that privatisation is ‘stupid’ (Ex-Minister Ryan). Who wants to be stupid? O course silver plates aren’t much good if you don’t have the food to eat from them. In the UK, the privatisation debate is about how a ‘war chest’ can be created for stimulus purposes. The consequences of the language used about privatisation frames very different outcomes. Unless one believes that the current configuration of Government ownership of assets is exactly optimal (an unfalsifiable position), then privatisation is reasonable to consider. It is our capital after all, and can be used to solve problems. By some estimates, the ESB is worth about €7.5 B**; there are perhaps 750,000 mortgages in the country. Privatisation would allow the quick writing down of these mortgages by €100,000 a piece, relieving enormous and growing distress, and giving the banks additional working capital to relieve other logjams in the economy. I am sure there are a thousand good reasons why this policy can’t be enacted, but there are 750,000 reasons why it could. And it is our money anyway, isn’t it?!

*This remark is in comment # 1, not the article itself, which makes a good argument against privatisations. However, things have changed a bit since August 3rd.

**I can’t find where I read this estimate, but there are relevant numbers here.

[This is the second in a series of posts relevant to the all-consuming topic in Ireland at the moment: the fall of the Fianna Fail/Green Party Coalition Government, and the resulting general election to take place on the 25 February 2011. My title approximates a question/comment posed by a guest (I think it was Jim Glennon, the former FF TD) on George Hook’s programme on Newstalk].

(II)

Theiron law of institutions is the name given to the concern of people who have power in institutions to preserve their power within that institution (even when the institution is failing), rather than being concerned with the success of the institution itself. We have seen this law in action during the recent ructions in Fianna Fáil. Taoiseach Brian Cowen continually asserted as he fell from 52% to 8% in the polls that he was the democratically-elected party leader. Fianna Fáil found itself incapable of terminating (as it fell from 40% to 14% in the polls) his badly-ailing leadership. And this despite the electoral cliff that Fianna Fáil was driving over! Disputes over Brian Cowen’s leadershipconvulsed Fianna Fáil. There is a substantial literature on successful and unsuccessful leadership. One major review suggests successful leadership requires obeying a few simple precepts. Leaders must be sensitive to their followers, support them, treat them with respect and exceed their expectations; to be positive and inspirational; to work hard and to be seen to work hard for the group; and not be overbearing or arrogant. Which of our leaders, past and present, can tick off these precepts successfully?

Solely focusing on individual leadership and ignoring the situations within which behaviour occurs is known as the fundamental attribution error, and is a cognitive bias caused by the salience of the person, and the relative invisibility of the system (group norms, laws, rules, etc.). The lesson for Irish politics is simple: changing personnel is not enough to solve our problems, because the dysfunctional system itself persists. We need substantial systemic changes too. Political decisions are often (usually?) taken within a group context (think Cabinet collective responsibility). Groupthink occurs when a group makes poor decisions because of high levels of within-group cohesion and a desire to minimise within-group conflict (as might happen in an exhausted, embattled and worn-out Government Cabinet!). The necessary critical analysis does not occur. NAMA would hardly have emerged as the optimal policy response had there been a competitive public forum to test and vet competing policy ideas (with the Cabinet adjudicating). The hugely-criticised ‘Credit Institutions (Stabilization) Act 2010’ (e.g., e.g., e.g., e.g.) would hardly have emerged from such a process. Such a process would show that vesting such astonishing power and authority in the frail, bounded rationality of a single individual (the Minister for Finance) is a recipe for future catastrophe. Groupthink can be reduced by the group having an extensive network of weakties to other individuals and groups. Weak ties provide us with novel ideas and knowledge, and provide a route to ‘reality-test’ planned courses of action. An extensive national and international weak tie network would provide Government Ministers knowledge, insights and ideas unavailable within the Dáil bubble.

[This is the first in a series of posts relevant to the all-consuming topic in Ireland at the moment: the fall of the Fianna Fail/Green Party Coalition Government, and the resulting general election to take place on the 25 February 2011. My title approximates a question/comment posed by a guest (I think it was Jim Glennon, the former FF TD) on George Hook’s programme on Newstalk].

(Figure with apologies and thanks to a variety of similar figures floating around the web)

No, we actually need to take much better quality decisions, ones that acknowledge the frailty and error-proneness of human cognition, and which are capable of changing as circumstances change and knowledge evolves

Four times in eighty years (the 1930’s, ‘50’s, ‘80’s and now) the economy has been wrecked. Rightly, there has been plenty of economic analysis (e.g.) of our current problems. There have also been attempts to locate our recurrent problem in the Irish personality (but nations don’t have personalities!), or in dispositions inherited from our colonial past (a novel research area for epigenetics, I suppose). Whatever about the Irish personality, there is no-one in power, and few alive, who remember Ireland as it was pre-1916/1921. We need to look for more proximate causes in the decisions made and executed by our national elites (the administrative, political and commercial classes in charge of the institutions powering the country).

How did our elites get it so spectacularly wrong? A useful way of looking at the problem is to focus on persistent and enduring cognitive biases and errors leading to faulty decision-making by individuals (political leaders, civil servants, bankers, etc.) and institutions (social systems and organisations: Government departments, banks, churches, etc). Looking for proximate causes in pervasive and enduring cognitive errors by individuals and institutions (the social systems within which collective cognition is organised) provides a route to prevent us persisting in correctable mistakes. Happily, we have a guide from more than fifty years of data in experimental psychology and experimental brain research to understand how human rationality and reason is bounded and error-prone. [UPDATE: see note at bottom]

(I)

The phrase ‘delusional’ has been used to describe the behaviour of certain members of our elites, but delusions imply the psychiatric diagnosis of pathological beliefs maintained contrary to all evidence. Anosagnosia (a more useful description) is the condition of literally being ‘without knowledge’ (being unaware) of a cognitive or other impairment, and behaving as if there is no problem. This might describe the issues regarding the lack of a regulatory response to capital adequacy in our banks! Additionally, the knowledge and expertise required to solve the problems confronting us is both greater than our elites understand and can acknowledge. This leads to anosagnosia within the cultures of these organisations. Irish elites do not know that they do not know, nor do they even know what they need to know. The figure at top tries to capture this idea. Both the party political system and the civil service systems undervalue expertise and suppress cognitive diversity. Substantial data show that complex and difficult problems (for example, how to rescue a collapsing economy) are best solved by groups with substantial intellectual strength and capacity (obvious), and substantial diversity of experience (not obvious).Truth be told, the problems we are grappling with are beyond the judgement and capacity of the few teachers and the couple of lawyers comprising the bulk of the Cabinet just leaving office. And we still lack (with some exceptions) the high-level policy formation and broad expertise inputs required to support the Cabinet when it has to make crucial decisions.

Our political system is constructed so that the proving ground for national politics is local council politics. This experience leaves politicians good at political manoeuvring and vote-getting, but ill-prepares them for the national game, which ends up reflected through the prism of the local, rather than the national or international. This is why many of our competitor countries deliberately bring extra cognitive diversity into their political systems. Famously, the Cabinet of the US Government has only one elected politician (the President). However, it can field a Nobel Prize in Physics (Secretary of State for Energy, Steven Chu), and world-class economics expertise (Timothy Geithner; Austan Goolsbee). Some have disputed the necessity for some form of national list system because it would have resulted in Sean Fitzpatrick being nominated to the Dáil. (Has this been a conspicuous problem in countries with national list systems?) This is an interesting cognitive error – not exploring counterfactuals to this example, as these would falsify the claim. It is even more possible that many people of capacity and ability are turned off by the system as it currently stands. After all, we have plenty of talent, but it shies away from electoral politics (to all our costs). Such arguments may result from cognitive dissonance(the unpleasant feeling caused by holding two contradictory beliefs simultaneously: for example, “our system isn’t delivering; I and my colleagues are good people and are part of the system; therefore it isn’t the system; the problems lie elsewhere” (with bad bankers, for example, although logically this may also be true!).The potential reduction in available Cabinet slots for non-list constituency candidates because of a list system presumably discommodes some too.

UPDATE: I forgot the Dunning-Kruger effect – a quote from the Wikipedia entry:

The Dunning-Kruger Effect is a cognitive bias in which unskilled people make poor decisions and reach erroneous conclusions, but their incompetence denies them the metacognitive ability to appreciate their mistakes.[1] The unskilled therefore suffer from illusory superiority, rating their ability as above average, much higher than it actually is, while the highly skilled underrate their own abilities, suffering from illusory inferiority. This leads to the situation in which less competent people rate their own ability higher than more competent people. It also explains why actual competence may weaken self-confidence. Competent individuals falsely assume that others have an equivalent understanding. “Thus, the miscalibration of the incompetent stems from an error about the self, whereas the miscalibration of the highly competent stems from an error about others.”[2]

And:

Kruger and Dunning proposed that, for a given skill, incompetent people will:

tend to overestimate their own level of skill;

fail to recognize genuine skill in others;

fail to recognize the extremity of their inadequacy;

recognize and acknowledge their own previous lack of skill, if they can be trained to substantially improve.